Union, Newspapers Come to Terms on Pension
Merger

According to the Associated Press, the Newspaper Guild
of Greater Philadelphia has agreed to end a lawsuit brought
over the proposed merger of the pension plans.
That lawsuit had charged that one of the plans was severely
underfunded and that the merger would endanger the health
of the second (see
Newspaper Union Moves To Block Pension Merger
).

Under the settlement, the guild said, it will merge its
$193 million pension fund with the United Independent Union
Pension Plan, a $10 million fund with 700 participants from
10 employers.
That new combined plan – to be controlled by a board with
representatives from the union, the independent plan and
the papers’ owner, Philadelphia Media Holdings – will then
absorb the company-controlled North Broad Street plan.

Settlement Terms

The settlement satisfies the union because it doesn’t
give the company control over the guild plan, according to
the AP.
The union was worried the company would take $8 million
from the guild plan to bring the $7 million North Broad
plan into compliance with federal rules.
The agreement allows the company to satisfy the rules
without adding the $8 million to the North Broad plan
because the plan is now part of a much bigger plan that is
fully funded, according to the union, which told employees
about the settlement in a memo Thursday.

Under new federal pension fund rules, a plan cannot make
lump-sum payments to retirees or terminated employees
unless it is fully funded. The North Broad plan, which was
set up specifically to make severance payments, was only
39% funded on January 1, 2007, according to the AP, citing
court documents.
However, merging the North Broad plan into the other fully
funded plans satisfies the new rules. The deal is expected
to be completed July 30.

The merged fund will be called the United Independent
Union-Newspaper Guild of Greater Philadelphia Pension
Plan.

District Court Judge Berle M. Schiller granted a
temporary restraining order, which was extended several
times with July 31 as the latest deadline (see
Judge Extends TRO on Pension Merger
).